What do you think of a military retirement system closer to a 401K?

2014-03-07T16:39:08-05:00

The Military is considering a new system similar to a 401k. What are your thoughts?

Response by CPT Private RallyPoint Member made Mar 8 at 2014 5:58 PM

2014-03-08T17:58:11-05:00

Not a fan at all.

Response by SSG(P) Private RallyPoint Member made Mar 8 at 2014 6:44 PM

2014-03-08T18:44:39-05:00

Just another way for the Federal Government to steal your money.

They have been stealing Social Security funds for decades now. The IOUs are starting to come due, and there is not anything to pay those IOUs with, and they CONTINUE to plunder the fund.

The new MyRA that the president is pushing is a Ponzi scheme as well. They take your money and buy our own Federal debt with it. Seeing as how badly Federal T-Bills are performing, the expected rate of return on these is pessimistic at best. Good luck trying to live on whatever (if anything) you can get back when you want to retire.

Better to just buy precious metals than have your "money" (1s and 0s) in a bank that is accessible to the government. Don't believe the government will take your money? Talk to those in Cyprus and the EU...

Response by CPT Private RallyPoint Member made Mar 8 at 2014 7:07 PM

2014-03-08T19:07:08-05:00

I have not seen the actual proposal (links?) but there are advantages, especially if there was a good match from Uncle Sam. Right now, if you serve less than 20 years and get out, you get absolutely nothing. With this, you would have something to show for any amount of time you served.

Additionally, (but dangerously) you can borrow from a 401k. This is especially beneficial to RC Soldiers who cannot collect anything from their retirement until age 60 (give or take a few years for deployments) no matter how long they serve.

Another thing to think about is that you can put more money into a 401k to end up with a higher benefit. In the current system, your only option to increase your benefit is to stay more years.

...and I see the "stay more years" thing as a negative. There are a lot of people who are not really interested in progressing in their military careers but are still on duty waiting for retirement (tying up promotions for people below them) or trying to beef up their retirement checks. This does not serve the military.

If it came out where the money would be essentially the same between what you would get per month under the current system vs the new system, I would be all for it. I get that there would be some people who would screw it all up. They will contribute the minimum and constantly borrow against it. Safe guards could be put in place or you can just insist that people take some personal responsibility - or a little of both.

Response by SFC Private RallyPoint Member made Mar 8 at 2014 7:07 PM

2014-03-08T19:07:43-05:00

This was being talked about 12 years ago when I retired. yes its a good idea but not as a replacement for the current retirement.

Response by LTC Private RallyPoint Member made Mar 9 at 2014 9:53 AM

2014-03-09T09:53:57-04:00

I think moving away from the 20 year retirement system will be good for the military. The all or nothing system makes force management mor difficult.

All Current Soldiers who do 20 should be grandfathered.

Response by SFC Joe Ping made Mar 9 at 2014 2:03 PM

2014-03-09T14:03:30-04:00

The people thinking this crap up have lost their minds. If you want to make it so we will need a draft keep screwing with benefits.

Response by SGT(P) Private RallyPoint Member made Mar 9 at 2014 5:09 PM

2014-03-09T17:09:24-04:00

Wait, we get something after we retire?

Guess I can stop playing the lotto now...

Response by MSgt Private RallyPoint Member made Mar 9 at 2014 6:35 PM

2014-03-09T18:35:56-04:00

Here's a link

http://m.military.com/daily-news/2014/03/07/pentagon-considers-401k-like-retirement-plans.html?ESRC=dod.nl

Better link;

http://www.militarytimes.com/article/20140306/SPECIAL14/303060030/Exclusive-DoD-proposes-revolutionary-changes-retirement-benefits

Exclusive: DoD proposes revolutionary changes in retirement benefits

After years of silence on the intensely controversial issue of military retirement reform, the Pentagon on Thursday unveiled a detailed proposal for fundamental, far-reaching changes to the current ...

Pentagon Considers 401(k)-like Retirement Plans | Military.com

In a revolutionary shift in how it would compensate retirees, the U.S. Defense Department is considering adopting a 401(k)-like retirement plan and other financial incentives for those who serve les...

Response by MSgt Private RallyPoint Member made Mar 9 at 2014 6:52 PM

2014-03-09T18:52:49-04:00

I think the system needs some revamping, but looking at these proposals worries me. I think they devalue the system and will do very little for retention.

I think if they considered a contribution to the service members TSP at each enlistment/reenlistment point then combine that with a reduction in the multiplier, say 2.0 per year served versus 2.5 would give the members something for their future even if they don't serve a full 20. Granted they can't touch that money until age 59 1/2, but it will be there growing for them over the years, not to mention if they leave the service they will be able to roll that money over to their own personal IRA, employer 401(k) and then have more control over it's growth.

They should also consider matching contributions to the TSP, just like GS civilians get. Congress authorized matching contributions already.

Just some thoughts. I'm no financial wizard but surely they could garner some savings and still maintain the 'retirement incentive' of continued service.

Response by Capt Private RallyPoint Member made Nov 17 at 2014 8:04 PM

2014-11-17T20:04:36-05:00

I'd be all for a retirement system kind of like the 15 year early retirement. Probably make us eligible for a retirement at 10 years. Pension = 2.5% * tis - .5% * (20- tis). 10 years would get you 20%, 15 - 35%, and 20 would be a full 50%. This system would still incentivize you to work towards 20 but it would leave you with nothing if you didn't make it to 20. That'd ease the minds of plenty of staffs and captains.

Response by SFC Gary (Bigsarge) Portier USARMY RET. made Jul 27 at 2017 2:00 PM

2017-07-27T14:00:18-04:00

Hell No, tho it's going there. You get out what you put in. Nothing in gets you nothing out. My life time Pension works Great for me plus TSP.